IMF downgrades global growth forecast due to war with Iran and warns of global recession risk - report

The International Monetary Fund has lowered its forecast for global economic growth in 2026 due to the war in the Middle East and warned that a protracted conflict could trigger a large-scale energy crisis and bring the world closer to a recession. This was reported by CNN, according to UNN.

Details

According to updated IMF estimates, the global economy will grow by 3.1% in 2026, which is 0.2 percentage points lower than the January forecast. The fund noted that this scenario is based on the assumption that the war will be relatively short-lived.

IMF Economic Counselor Pierre-Olivier Gourinchas stated that the situation has sharply deteriorated since the start of hostilities in the region.

Global prospects have sharply darkened since the start of the war in the Middle East

The fund also warned that the conflict could escalate into an unprecedented energy crisis if hostilities drag on and oil and gas prices continue to rise.

Under one negative scenario, if energy costs rise by 100-200% compared to January and remain at that level until 2027, global economic growth rates could fall to 2%.

The IMF notes that this would be critically close to a global recession, which the fund defines as growth below 2%. This has only happened four times since 1980.

In addition, the IMF predicts an acceleration of global inflation to 4.4% in 2026.

The report also states that before the war, the global economy showed better results than expected, and the forecast could even have been revised upwards.

Second round of US-Iran talks - no decision yet - Media14.04.26, 17:57 • 2898 views